My last week’s view, I mentioned two possibilities
(Link below)
Possibility 1 : BANK NIFTY starts performing in coming two sessions very strongly and NIFTY rushes to 10800-10900 levels. VIX further drops around 22-23 levels.
Possibility 2 : NIFTY fizzles out the rally and drops back or consolidates.
Out of this, Possibility 1 played out.
My observations for the week
I define and follow the market trend on 4 time frames.
Monthly - Down
Weekly - Up
Daily - Sideways
Hourly - Sideways
Interesting point to note is that from March end, NIFTY never consolidated in a small range for more than 3 days. This time it consolidated for 4 days so far. NIFTY formed 2 daily bearish patterns and for the week it formed indecisive candle.
BANKNIFTY was a surprise performer for the start of the week, and now it also broke down. Near the end of the regime, lagging sectors perform, and it also leads the decline. I think that is what is happening with BANK NIFTY and NIFTY.
VIX has fallen further. It is stabilising in the 25~ range. This is the area where some surprise can happen from a volatility perspective. Intra-day range for NIFTY is also down.
FII data is little on the negative side, DII selling in July, mostly quarter effect.
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All these are indications
Traders should not expect volatile continuation of up move. Even if NIFTY moves on upside, it’ll not be with strong momentum lasting for a week.
I don't know if this regime shift is sideways congestion, or sharper downside below 10000 at this point.
10700 - 10920 is a long term congestion zone. Market either turns from here quickly or spends up to 10-12 weeks here.
My view for the coming week
10580-10560 is a very important zone for me to watch. If NIFTY drops below this zone this week, I think NIFTY has started a bearish move, momentum of which is not known this time.
If NIFTY continues in the 10700-10920 zone for this week, then I think NIFTY may keep distributing in the zone for some time.
There is a possibility of a bull trap in this zone, sharp up move, which looks like a breakout of 10850, but it fails quickly in a day.
My action plan and possible trades
If there is a breakout of 10850, I am not going to buy it till it gets confirmed by 2 days sustaining above it.
I’ll short below 10730 , but will be quick to cover until NIFTY is below 10560-10580 zone, which can give good support.
If NIFTY happens to go near 10980-10990 levels, I’ll take a reversal trade.
Some positional trade Ideas
10900/ 11000 Credit CALL spread July expiry.
10800/10900 Credit CALL spread August expiry.
10500/10400 Credit PUT spread weekly expiry.
Buy 10300 or 10400 PUT option for August (Risky trade). Can be hedged with 10000 PUT on same or shorter timeframes.
Last week's review
(Link below)
Possibility 1 : BANK NIFTY starts performing in coming two sessions very strongly and NIFTY rushes to 10800-10900 levels. VIX further drops around 22-23 levels.
Possibility 2 : NIFTY fizzles out the rally and drops back or consolidates.
Out of this, Possibility 1 played out.
My observations for the week
I define and follow the market trend on 4 time frames.
Monthly - Down
Weekly - Up
Daily - Sideways
Hourly - Sideways
Interesting point to note is that from March end, NIFTY never consolidated in a small range for more than 3 days. This time it consolidated for 4 days so far. NIFTY formed 2 daily bearish patterns and for the week it formed indecisive candle.
BANKNIFTY was a surprise performer for the start of the week, and now it also broke down. Near the end of the regime, lagging sectors perform, and it also leads the decline. I think that is what is happening with BANK NIFTY and NIFTY.
VIX has fallen further. It is stabilising in the 25~ range. This is the area where some surprise can happen from a volatility perspective. Intra-day range for NIFTY is also down.
FII data is little on the negative side, DII selling in July, mostly quarter effect.
------------------------------------------------------------------------------------------------------------------------------
All these are indications
Traders should not expect volatile continuation of up move. Even if NIFTY moves on upside, it’ll not be with strong momentum lasting for a week.
I don't know if this regime shift is sideways congestion, or sharper downside below 10000 at this point.
10700 - 10920 is a long term congestion zone. Market either turns from here quickly or spends up to 10-12 weeks here.
My view for the coming week
10580-10560 is a very important zone for me to watch. If NIFTY drops below this zone this week, I think NIFTY has started a bearish move, momentum of which is not known this time.
If NIFTY continues in the 10700-10920 zone for this week, then I think NIFTY may keep distributing in the zone for some time.
There is a possibility of a bull trap in this zone, sharp up move, which looks like a breakout of 10850, but it fails quickly in a day.
My action plan and possible trades
If there is a breakout of 10850, I am not going to buy it till it gets confirmed by 2 days sustaining above it.
I’ll short below 10730 , but will be quick to cover until NIFTY is below 10560-10580 zone, which can give good support.
If NIFTY happens to go near 10980-10990 levels, I’ll take a reversal trade.
Some positional trade Ideas
10900/ 11000 Credit CALL spread July expiry.
10800/10900 Credit CALL spread August expiry.
10500/10400 Credit PUT spread weekly expiry.
Buy 10300 or 10400 PUT option for August (Risky trade). Can be hedged with 10000 PUT on same or shorter timeframes.
Last week's review
